Brexit and Cyber threats biggest risks to UK businesses in 2019

Cyber threats and changes in legislation and regulation, including concerns around Brexit are considered the top risks by UK risk experts (joint top with 48% of responses), according to the Allianz Risk Barometer 2019. Cyber incidents (37% of responses) are neck-and-neck with Business interruption (BI) (37% of responses) as the top business risks globally.

“It’s no surprise to see changes in legislation and regulation as the new top risk in the UK, jointly with cyber threats,” said Tracey Hunt, Deputy CEO, Allianz Global Corporate & Specialty (AGCS), UK.

“Uncertainty around Brexit along with concerns around a potential increase in the regulatory burden and global trade disputes have made confidence fragile. UK businesses also continue to be occupied by the threat of cyber-attacks. The consequences of a major data beach have never been greater since the EU’s General Data Protection Regulation (GDPR) came into force with data breaches potentially now resulting in huge fines.”

Workforce skills shortages are a new entry into the Top 10 UK Risks

Shortages of skilled workers appears in the top 10 UK risks – coming in at number 7 – for the first time, with factors such as Brexit uncertainty, changing demographics and a shallow pool of talent in the digital economy contributing to its rise. A UK study** found that nine in 10 employers were struggling to recruit the skilled staff they need, with Brexit set to make this worse.

Shortage of skilled workforce also appears for the first time among the 10 top business risks globally at 10; as well as in many countries in Central and Eastern Europe, US, Canada and Australia.

Ludovic Subran, Deputy Chief Economist of Allianz said: “Skilled workforce — and human capital more generally — has become the scarce resource of the digital economy. Competition is fierce between companies to get new recruits with competencies in artificial intelligence, data science, or ‘frontier risk management’ such as managing cyber or reputational risk as most of these jobs did not exist 10 years ago. Even attractive salaries do not suffice as the pool of recruits with the needed skillset is limited and the urgency to onboard them does not allow for on-the-job training.”